It has been reported this week that SiriusXM is acquiring the podcast platform Stitcher from the E.W. Scripps Company for $325 million. The Stitcher company includes three distinct podcast business lines: the Midroll advertising rep firm; owned-and-operated podcast networks including the comedy-focused Earwolf; and the Stitcher podcast listening platform.
The Evolution of Stitcher
Scripps was an early entrant into podcasting, acquiring Midroll in 2015 for $55 million and the Stitcher app in 2016 for $4.5 million. Since then, Stitcher has been a leader in the fast-growing podcast industry, growing revenue at a CAGR of 52% from 2016-19. Stitcher’s 2019 revenue was $72.5 million. This impressive growth trajectory underscores the increasing popularity of podcasts as a medium for both entertainment and information.
Stitcher’s success can be attributed to its diverse range of content and its ability to attract high-profile talent. The Earwolf network, for example, is home to popular shows like “Comedy Bang! Bang!” and “How Did This Get Made?”, which have garnered large, dedicated audiences. Additionally, Midroll’s expertise in podcast advertising has enabled Stitcher to effectively monetize its content, making it an attractive acquisition target for SiriusXM.
SiriusXM’s Strategic Move
The acquisition of Stitcher by SiriusXM is a strategic move that aligns with the company’s broader goals of expanding its digital audio presence. SiriusXM, known for its satellite radio services, has been increasingly focusing on digital content to stay competitive in a rapidly changing media landscape. By acquiring Stitcher, SiriusXM gains access to a vast library of podcasts and a well-established platform for both content creation and distribution.
This acquisition also allows SiriusXM to tap into the growing podcast advertising market. According to a report by the Interactive Advertising Bureau (IAB) and PwC, podcast advertising revenues in the U.S. are expected to surpass $1 billion by 2021. With Midroll’s expertise in this area, SiriusXM is well-positioned to capture a significant share of this market.
“This sale is consistent with Scripps’ track record of growing businesses that capitalize on the evolution of consumers’ media habits and then unlocking shareholder value through spinoffs, exits and continued organic growth,” said Symson. “Over and over, this strategy has proven effective as well as profitable for the company and its shareholders.
“Today’s announcement, and the metrics around this sale, are an affirmation of our investment-for-growth strategy. We are firmly committed to our national businesses and are enthusiastic about the opportunities we see ahead in digital audio, over the top and over the air television.”
The acquisition also highlights the increasing importance of podcasts in the broader media ecosystem. Podcasts offer a unique blend of intimacy and convenience, allowing listeners to engage with content on their own terms. This flexibility has made podcasts particularly popular among younger audiences, who are often looking for alternatives to traditional media formats.
Moreover, the deal is expected to bring synergies between SiriusXM’s existing content and Stitcher’s offerings. For instance, SiriusXM could potentially integrate its exclusive radio shows into the Stitcher platform, providing subscribers with even more content options. This could also pave the way for new collaborative projects between SiriusXM’s talent and Stitcher’s podcast creators.
The acquisition of Stitcher by SiriusXM represents a significant milestone in the evolution of digital audio. It not only underscores the growing importance of podcasts but also highlights the strategic moves companies are making to stay relevant in a rapidly changing media landscape. With this acquisition, SiriusXM is well-positioned to become a major player in the podcasting world, offering a diverse range of content and innovative advertising solutions.
Source: Scripps
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